Cliffs may export 40% of chromite from Ontario Ring of Fire for processing

05/10/2012 01:50 EDT
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Updated
07/10/2012 05:12 EDT

CP

TORONTO - Ontario will likely give Cliffs Natural Resources an exemption from the Mining Act to process a large amount of the chromite it takes out of the Ring of Fire offshore, Premier Dalton McGuinty suggested Thursday.

The New Democrats want as much of the ore as possible smelted and refined in Ontario, and say more processing facilities should be built to make sure the jobs stay in the province as well.

Cliffs announced Wednesday it plans to invest $3.3 billion to develop a chromite mine in the far north, a transportation corridor and a $1.8-billion smelter near Sudbury.

In the legislature, the NDP released testimony from Cliffs' vice-president Bill Boor before a Commons committee in February showing the company plans to export up to 40 per cent of the chromite offshore for processing into a key ingredient of stainless steel.

"People in Ontario want to see those resources used to create good, sustainable, value-added jobs, not shipped away to create jobs overseas and products that we then buy back at twice the price," said NDP Leader Andrea Horwath.

McGuinty said Ontario "cannot put up walls," noting the province benefits from processing raw materials from other provinces and countries.

"We cannot say to those people who are sending their raw materials here that we’re no longer going to process those there, and we cannot say to proponents such as Cliffs that there’s no way that they can send any of those materials to other parts of the world outside of Ontario to process," McGuinty told the legislature.

However, the NDP say other provinces and countries that send raw materials to Ontario for processing don't, and won't, have the capacity to do it themselves, but Ontario has a large enough ore deposit to justify building smelters and refineries.

At least one more chromite mine is planned in the Ring of Fire, and the New Democrats fear about half of the ore will be shipped to China for processing.

Northern Development and Mines Minister Rick Bartolucci told reporters the NDP's position was unrealistic, and said he was confident the Ring of Fire would open up more jobs for Ontarians.

"The smelter in the Nickel Belt line gets 70 per cent of its material from outside of Ontario," he said.

"If we build walls around Ontario, that smelter is no longer viable and hundreds of people will be put out of work."

The Progressive Conservatives said everyone wants as much of the processing and refining done in Ontario as possible, but agreed with the Liberals that it is impossible to set up artificial barriers in an international market.

"We rely on ore coming in to be processed as well, so I think the NDP’s approach is unrealistic, where you say 100 per cent of anything mined in Ontario has to be processed in Ontario," said Tory mines critic Norm Miller.

"That’s not the way the real world works."

The government is still negotiating a final contract with Cliffs, and could not say how much taxpayers will have to kick in for the huge development or whether the public or Cliffs will be paying for an access road that is estimated to cost $600 million.

"Obviously that too is subject to the discussion at this point in time," said Bartolucci.

"We understand that as we move forward there will be a collaborative effort that will be necessary to realize the potential of the Ring of Fire, and that’s why we’re in very serious negotiation with Cliffs."

Many First Nations complained they were not consulted about the Cliffs' development, and expressed concerns about the impact of the mine on such a pristine area of northeastern Ontario.

The Ring of Fire, which includes the largest chromite discovery in North America and has the potential for production of nickel, copper and platinum, is about 500 kilometres northeast of Thunder Bay.